Senators introduced bills to reform PBMs and create new FTC probe
Two top senators have reintroduced legislation that would introduce several reforms to pharmacy benefit managers, including prohibiting clawbacks of pharmacy payments.
Sens. Maria Cantwell, D-Washington, and Chuck Grassley, R-Iowa, reintroduced on late Thursday the Pharmacy Benefit Manager Transparency Act and the Prescription Pricing for the People Act. The move shows the lawmakers are not backing down from going after PBMs in the latest Congress.
“PBMs, the industry middlemen, operate in the shadows and drive up prices for consumers,” Grassley said in a statement. “These bills bring about greater transparency to their industry and prevent unfair or anticompetitive practices.”
The transparency act seeks to outlaw several practices that pharmacies charge are unfair. Chief among the practices is to claw back a payment already made to a pharmacy for a drug. Another is to charge or increase a fee to pharmacies to help offset the costs of the reimbursed medicine.
It would also mandate that PBMs file an annual report with the Federal Trade Commission (FTC) that details their pricing practices. For instance, the report must disclose the difference between the amount each health plan pays the PBM for prescription drugs and, in turn, how much the PBM pays the pharmacy on behalf of the health plan.
It also must detail the aggregate total fees a PBM has clawed back from a pharmacy.
If a PBM has its own pharmacy, the company must describe any differences it charges between affiliated and independent pharmacies. A key complaint among independent pharmacies is that PBMs attempt to steer patients toward affiliated dispensaries.
The Prescription Pricing for the People Act would also require the FTC to examine consolidation within the PBM industry, which is heavily concentrated among three major players: Caremark, Express Scripts and Optum Rx. The probe would examine any potentially abusive behavior by PBMs.
The FTC must craft policy recommendations to Congress on how to rein in any such practices.
The FTC has already started what it calls a 6(b) study into the industry, but the lawmakers say “it is important to conduct a thorough and timely study of the pharmaceutical supply chain,” according to a release.
Both bills were introduced in the last Congress but did not reach President Joe Biden’s desk. The Pharmacy Benefit Manager Transparency Act was passed out of the Commerce, Science and Transportation Committee, which Cantwell chairs, but did not make it through the Senate.
However, the reintroductions likely show that this congressional session lawmakers will keep up attacks on the industry, even amid a divided government as the House is controlled by Republicans.
Opponents of the industry quickly lauded the reintroduced legislation.
“For years now, PBM tactics have led to increased costs and delayed access to care for consumers,” said Anne Cassity, senior vice president of government affairs for the National Community Pharmacists Association, in a statement. “They have also made it harder for small business pharmacies to keep their doors open.”
The PBM lobbying group Pharmaceutical Care Management Association slammed the Pharmacy Benefit Manager Transparency Act in a statement to Fierce Healthcare.
“Unfortunately, the legislation continues to fundamentally misconstrue the role of pharmacy benefit companies and unfairly proposes to ban basic business practices that are proven to reduce prescription drug costs for patients, employers, and taxpayers," the group said in a statement.
The group says that it does support the Prescription Pricing for the People Act.
"The broad approach taken by S. 113 will better reflect the role big drug companies play in setting and raising prices," PCMA said.
Reporter: Robert King